Kriya…
Vidya…
Ghyan…
Suba…
SAKTHI SUGARS
LTD.
Analyst Meet
Mumbai, April 12, 2006
Structure • Sakthi Sugars – At a Glance• Sugar & Allied Business
– Sakthinagar Unit– Sivaganga Unit– Dhenkanal Unit
• Sakthi Soya• Sakthi Auto Component Ltd.• Operational Highlights• Financial Highlights• Social Commitments• New Developments• Crystal Ball Gazing
Sakthi Sugars – At a Glance
Vision• To be one of the top 5 producers of Sugar in India• To be one of the top Auto component manufacturers in
India• To be a leading producer of Alcohol and allied energy
products• To have the best possible alternative power producers in
the country• To maximize the trade in Raw sugar so as to maximize
the earnings of the company
Business OverviewSnapshot• Fourth largest sugar company in India in terms of sugar produced• The largest distillery in Tamilnadu• One of the few fully integrated sugar complexes in the country• Among the first to handle raw sugar processing in the country• One of the lowest cost power projects in the country• Soya unit, one of the first to produce edible Protein• Auto component unit, sole supplier to Indian market
Business OverviewInfrastructure• 3 Sugar Units (Sakthinagar – Tamil Nadu, Sivaganga – Tamil
Nadu, Dhenkanal – Orissa): Total crushing capacity 13,500 TCD• 2 Distillery Units (Sakthinagar, Dhenkanal): Total capacity of
120,000 litres per day• 2 Co-generation Units (Sakthinagar, Sivaganga): Total capacity 35
MW• 1 Soya Unit (Pollachi – Tamil Nadu): Total capacity 90,000 MT per
annum• Auto Component Subsidiary – manufactures critical parts for the
Auto industry
Sugar – The Pecking Order
* includes sales from other businesses & does not include Shree Ambika Sugars
Company Name Sugar Rank Sales RankProduction (INR Crores)
(in Lakh Mts)
Sakthi Sugars Limited 3.27 4 617 5 Bajaj Hindustan 4.34 1 837 2 Balrampur Chini 3.71 2 814 3 Bannariamman 1.34 12 489 8 DCM Shriram Ind * 1.43 9 532 7 Dhampur Sugar 1.35 11 466 9 Dharani Sugars 0.47 18 160 16 Dwarikesh Sugar 0.84 16 155 17 EID Parry * 2.95 5 717 4 Mawana Sugar 1.60 6 554 6 Oudh Sugar Mill 1.00 15 355 11 Rajshree Sugars 1.34 12 179 15 Rana Sugars 0.48 17 134 18 Simbhaoli Sugar 1.43 8 391 10 Shree Renuka Sugars 1.11 14 226 14 Thiru Arooran 1.57 7 298 12 Triveni Engg. * 3.63 3 963 1 Upper Ganges Sugar 1.42 10 265 13
Sugar & Allied Businesses
Sakthinagar
Sugar Division• Capacity of 7,500 TCD• Situated in most favourable climatic zone in the country• Highest quantum of sugarcane crushing in a single unit in the country• Current year crushing target - 22 lakh MT• Capable of operating 365 days in a year• Revenue generation in FY06 to be about Rs. 390 crore
SakthinagarDistillery Division• Capacity of 90,000 litres per day• Operates 365 days per annum• Capable of producing 50,000 litres of Ethanol per day• Production expected to be at 3 crore litres in FY06• Revenues expected to be around Rs. 62.4 crore
SakthinagarCo-generation Division• 32 MW generation capacity• Project cost of Rs. 2.1 crore per MW – lowest in the industry• Commissioned in November 2003• Total power production per annum will be about 2,650 lakh units and
the evacuation to the state grid per annum will be about 170 lakh units
• Revenue generation of Rs. 53.7 crore expected
SivagangaSugar Division• Capacity of 4,000 TCD; Capable of 360 days operation• Current year crushing will be about 6.5 lakh MT, in addition to
30,000 MT of raw sugar refining• Crushing will reach 10 lakh MT during the next year• Situated near the Tuticorin port, resulting in huge benefits on
transport costs on imports and exports• Annual revenues from this unit is expected to be about Rs. 160
crore in FY06
SivagangaCo-generation Division• Incidental co-generation; Capacity 5.5 MW• Evacuation to the State Grid shall be 18 lakh units in FY06• Revenue shall be Rs. 0.57 crore
DhenkanalSugar Division• Capacity of 2,000 TCD; Operation throughout the year – 180 days of
Sugarcane and 180 days based on raw sugar• Positioned in sugar deficient North-East region; Capable of
processing 300 tons of Raw sugar daily• Proximity to Paradeep port gives tremendous advantage in terms of
transports costs on Imports• Cane crushed during 2006 will be 2.0 lakh MT, Raw sugar refining
will be 25,000 MT; Total revenues shall be Rs. 82 crore
DhenkanalDistillery Division• 30,000 litres per day capacity; Total production for FY06 will be 35
lakh litres• Revenue shall be Rs. 10 crore
Raw Sugar – The Success Story• First company in India to process imported raw
sugar• First company in the world to take-up refining of raw
sugar in a plantation white sugar factory• All the units are capable of processing imported raw
sugar • Better positioning of the units near port locations to
take advantage on the arbitrage on the world sugar market
Raw Sugar Processing Data
Particulars FY04 FY05FY06
9 Months
Raw Sugar Processed (MT) 79,100 205,507 65,784
Average landed Cost US$ / MT 240.3 263.5 301.0
Export of Whites Sugar (MT) 1,000 75,000 67,558
Average Export Price US$ / MT 206.6 286.8 350.0
Sakthi Soya
Factfile• Started as an independent company – now a division• State-of-the-art plant located at Pollachi with a capacity of
300 TPD and 100 TPD edible oil refinery• Has Flash De-solventising System to manufacture high-
protein soya flour and a Texturised Vegetable Protein (TVP) capacity of 20 TPD; also produces TVP or soya chunks for the retail market
• Shortlisted for supply of food grade edible flour for World Food Programme of UN
• Revenues of Rs. 35 crore expected in FY06
Sakthi Auto Component Ltd.
Snapshot• Established in 1983 (as a division of Sakthi Sugars)• Capacity of 2,000 tons of castings per month• Equipped with Flaskless vertical DISA moulding line and
Special purpose dedicated Machining Lines• Has sophisticated facilities for R&D• CNC Machine Division has imported equipments for
machining rough castings to exacting standards of dimensional castings
• Single source supply for critical components to Maruti Udyog (17 years) and Hyundai
OEM Vendor• Has proven track record in providing high value safety
critical auto components to leading domestic and global OEMs
• First vendor in Asia Pacific to obtain orders from Delphi North America
• Further orders obtained from ACI (Renault), GM India, GM Korea and GM Thailand
• 30% of turnover from exports, which is likely to grow by 50% per annum
Steering KnucklesSteering Knuckles Brake Drums & DiscsBrake Drums & Discs
Exhaust ManifoldsExhaust Manifolds
Brake CalipersBrake Calipers
Differential CaseDifferential Case
Product Line
Revenue Mix
CustomerMonthly Sales –
FY06
(Rs. Crore)
Maruti Udyog 6.0Ilgin Automotive (Hyundai) 1.7IPI – USA 1.0Delphi – Mexico 0.9Delphi – USA 1.0Others 1.9
Total 12.5
Operational Highlights
Operations – Cane Crushed, Sugar Produced & Recovery
0
5
10
15
20
25
30
FY97 FY98 FY9915
mnths
FY00 FY01 FY02 FY03 FY04 FY05 FY069mnths
Cane Crush(Lakh Mts) Sugar Produced (Lakh Qtls) Recovery (%)
Financial Highlights
Performance For Mar 06 Particulars Mar 06
(3 months)Mar 05
(3 months)Mar 06
(9 months)Mar 05
(9 months)
Cane Crushed (Lakh Mts) 9.14 3.42 18.97 5.21
Raw Sugar Processed (Lakh Mts) 0.13 0.72 0.79 1.54
Sugar Production (lakh Mts) 1.05 0.97 2.53 1.78
Total Income (Rs. in Crores ) 239.14 212.42 619.75 429.86
EBIDTA 79.55 39.96 151.92 63.62
Interest 18.93 8.60 56.19 28.83
Depreciation 2.98 2.85 8.90 8.63
Profit for the period 57.64 28.51 86.83 26.16
Prior year adjustments 23.48 23.78 0.06
Net Profit 34.16 28.51 63.05 26.10
EPS (in Rupees) 10.9 9.08 20.1 8.3
Performance (Contnd)• The cane crushing has more than tripled for the 9
months• The margins from Cogen plant has gone up many folds
due to absence of fuel cost • The sugar realisation has steeply increased from 16350
per Mt for qtr Mar 05 to 17600 per mt for the Mar 06 qtr• The company had exported 26558 Mts during the qtr on
a total sale of 103676 Mts• The realisation on exports was higher by Rs.1000 per
Mts and the company will continue to export about 50% of its production in the next one year
Segment-wise TurnoverSegment FY02 Fy03 FY04 FY05
Sugar 441.33 248.10 224.82 439.35
Alcohol 38.37 38.74 55.79 84.43
Power 83.46
Soya 32.96 34.85 29.31 17.51
Auto Component 68.71 75.40 91.18 113.46
( Rs Crores)
Segment-wise EBIDTASegment FY02 Fy03 FY04 FY05
Sugar 59.13 -13.36 -8.40 21.14
Alcohol 12.02 12.54 16.51 43.25
Power 16.49
Soya 2.85 2.45 -4.14 -3.23
Auto Component 16.50 18.59 17.63 22.19
( Rs Crores)
Shareholding Pattern
Promoters39%
Banks & FI's4%FII's
18%
Mutual Funds
5%
Public34%
New Opportunities
Raw Sugar Processing
• The sugar industry is in the process of decontrol• Sakthi is the first company to start raw sugar processing in
India• Location of factories across ports at different sugar price
zones gives edge to gain on sugar arbitrage
Ethanol Blending• 5% Ethanol blending with petrol has been made compulsory
with effect from 1st October 2003 in nine sugar producing States
• Government exploring admixture with diesel• Will save substantial forex • Eco-friendly product : answer of the times • Will lower emission of green house gases – will take to Euro
IV faster• To replace use of MTBE as an oxygenate in fuel• To increase demand for alcohol and thereby molasses
Attractive Co-generation Incentives• Electricity Bill 2003 passed to open up power sector• Sugar industry can generate 4,000 MW surplus power by
using bagasse as by-product• 10% power in India to come from renewable energy source• Power generation from bagasse comes under clean power• Soft loans to be provided from Sugar Development Fund to
encourage co-generation at 4% interest• Power distributors in India have to buy a certain percentage
of power from renewable energy source
Social Commitment
Responsibility to Society• The group has established and runs many colleges,
polytechnics and schools.• The total number of students in such institutes are around
20,000• Rural Hospitals are being maintained • The number of patients is around 700 per day• A leprosy eradication programme is run by the group
Responsibility to Society• Many other institutes to deal with physically challenged and
elders are being maintained.• The colleges run by the group are ranked amongst the best
in the country• A de-addiction center is maintained
Crystal Ball Gazing
Expansion – Elixir for Growth• Rapid expansion on the anvil• Total Capital Expenditure of Rs. 240 crore is planned over
the next 18 months• Expansion in sugar business – greenfield (3500 TCD)• Expansion of co-generation capacity by 85 MW
Sugar
• New plant with a capacity of 3,500 TCD planned• New unit to have a 25 MW co-generation plant• Capex estimated to be around Rs. 120 crore• Plant expected to be commissioned by March 2007• Revenue generation in full year of production expected to
be in the region of Rs. 200 crore
Co-generationSakthinagar• The company plans to increase the co-generation capacity by 25
MW taking the total capacity to about 60 MW • The investment expected is about Rs. 60 crore• The expected date of commissioning is June 2007• The incremental revenues shall be about Rs. 40 croreSivaganga• Propose to replace existing 5.5 MW incidental capacity with a full
fledged 35 MW capacity co-generation unit• Capex expected about Rs. 80 crore• New co-generation unit expected to be commissioned by March
2007• Additional revenue generation of around Rs. 40 crore expected
Future Guidance
• Cane crushing levels are likely to go up to 43 lakh MT by FY08
• Sugar revenues likely to grow by 20% by FY2008• Power revenues likely to increase by 300% by FY08will
triple by FY08• Auto revenues are likely to grow by 200% by FY08 with
the existing order book position
THANK YOU
Sarvam Sakthi Mayam